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Tax Amnesty Scheme 2019, & Recommendations For Real Estate Sector

ISLAMABAD: On Tuesday, the federal cabinet has approved a tax amnesty scheme that is allowing the citizens to declare their previously undisclosed properties in a proposal to identify high earners for more efficient tax collection.

Tax Amnesty Scheme & The Government

The Prime Minister’s Adviser on Finance Hafez Sheikh has announced the approval of the scheme. The amnesty scheme was approved in a session of the federal cabinet chaired by the Prime Minister in Islamabad on 14 May.

Finance Adviser Hafeez Sheikh while describing the main objective of the amnesty scheme said that the purpose of this scheme is not the generation of revenue but it is for the documentation and formalization of the black economy. He added that they have tried their best to make this scheme as simple as possible so people do not have problems to understand it and implementation is seamless. Amnesty Scheme is announced not to threaten or scare people but it is presented to raise the spirit of businessmen.

Who Can & Can’t Avail Tax Amnesty Scheme 2019

Every Pakistani citizen — except for public office holders and their families— could avail this scheme to declare all previously hidden properties both abroad or in Pakistan.

How Much To Pay To Whiten The Undeclared Assets

To Declare Asset in Abroad:

A citizen could use the scheme to whiten previously undeclared assets abroad by paying a 4% tax.

According to this scheme, a citizen declaring its cash will need to keep the amount in a Pakistani bank account. A citizen who wishes to keep the money abroad after getting it whitened would have to pay 6% tax.

For the Real Estate Sector

A new condition is introduced in this Amnesty Scheme that to declaring properties, the value on which tax would be charged would be the market value, given that it is not less than 1.5 times the FBR-assigned value.

Recommendation for tax amnesty scheme for real estate sector

1 percent tax on those declaring property by June 30, 2019

2 percent tax on those declaring property by September 30, 2019

4 percent tax on those declaring property by December 31, 2019

Duration of New Amnesty Scheme

Pakistan Tax Amnesty Scheme 2019 is offered till 30 June 2019. However, the final stage of the scheme will end on December 31, 2019. It is made clear from the government that the deadline would not be extended and that the scheme was the last opportunity for Pakistani citizens to declare previously undisclosed assets before the law takes its course.

Scheme For Benami Accounts

This new Tax Amnesty scheme would also facilitate the holders of benami (nameless) accounts and properties in declaring their assets before they are seized under a new law for benami assets.

Last Chance for Avoiders

Government of Pakistan after the announcement of this new Tax Amnesty Scheme 2019 has made it clear that it was the last chance for tax avoiders. It is recommended to come and avail this opportunity before the law takes its course.

Tax Amnesty Scheme 2019 Recommends:

5 percent tax on people declaring assets by June 30, 2019

10 percent tax on persons declaring assets by September 30, 2019

20 percent tax on persons declaring assets by December 31, 2019

30 percent tax on persons declaring assets by March 31, 2020

40 percent tax on individuals declaring assets by June 30, 2020

Recommendation for investment in Pakistan Banao Certificates for those declaring assets abroad

1 percent tax on those declaring property by June 30, 2019

2 percent tax on those declaring property by September 30, 2019

4 percent tax on those declaring property by December 31, 2019

The scheme will also be applicable on benami accounts

3 percent tax on undeclared sales

Individuals holding government positions after 2000, cannot avail this scheme.

Tax Amnesty Scheme 2019 will not be applicable to cases being heard in court

Shabbar Zaidi (FBR) said the government is focusing to increase the tax net to improve the economy.

It would be right to say that this Tax Amnesty Scheme is one of the biggest attempts of the government to increase its revenue base in a country where hardly one percent of the adult population is paying taxes.

For further updates and details stay connected to Universal Property Network.